Patricia Gomez owns a company called Ceram-Lite which manufactures ceramic kitchenware.Over the past 10 years, Ceram-Lite has enjoyed steady growth. However, recently, there hasbeen increased competition in kitchenware as a result of successful TV shows like CelebrityChef. Gomez, Ceram-Lite's CEO, believes an aggressive strategy will be needed to meet thecompany's goals.You have been provided with the following information for the current year (2022) for Ceram-Lite's flagship Dutch Oven dish, which Gomez has indicated will be the focus product for theupcoming holiday season:Variable Costs (per dutch oven)Direct MaterialsDirect Manufacturing LabourVariable Overhead (manufacturing,marketing, distribution, and customer service)Total Variable cost per dutch ovenFixed CostsSelling PriceExpected SalesIncome tax rateManufacturingMarketing, distribution, and customer serviceTotal Fixed Costs50,000 units555$$$18302876$ 18,000$ 155,760$ 173,760$ 88$4,399,50038% If the additional $27,500 is spent, what are the required 2023 revenues for 2023 net incometo equal 2022 net income? * Read this question carefully. You may find a diagram helpful tofigure out what this question is asking *

Variable cost means the cost which vary with the level of output and fixed cost remain same whatever…

If the additional $27,500 is spent, what are the required 2023 revenues for 2023 net income to equal 2022 net income? * Read this question carefully. You may find a diagram helpful to figure out what this question is asking

If the additional $27,500 is spent, what are the required 2023 revenues for 2023 net income to equal 2022 net income? * Read this question carefully. You may find a diagram helpful to figure out what this question is asking

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Patricia Gomez owns a company called Ceram-Lite which manufactures ceramic kitchenware.
Over the past 10 years, Ceram-Lite has enjoyed steady growth. However, recently, there has
been increased competition in kitchenware as a result of successful TV shows like Celebrity
Chef. Gomez, Ceram-Lite's CEO, believes an aggressive strategy will be needed to meet the
company's goals.
You have been provided with the following information for the current year (2022) for Ceram-
Lite's flagship Dutch Oven dish, which Gomez has indicated will be the focus product for the
upcoming holiday season:
Variable Costs (per dutch oven)
Direct Materials
Direct Manufacturing Labour
Variable Overhead (manufacturing,
marketing, distribution, and customer service)
Total Variable cost per dutch oven
Fixed Costs
Selling Price
Expected Sales
Income tax rate
Manufacturing
Marketing, distribution, and customer service
Total Fixed Costs
50,000 units
555
$
$
$
18
30
28
76
$ 18,000
$ 155,760
$ 173,760
$ 88
$4,399,500
38%

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